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This year India’s economy will grow at a rate of 6.1%. Moody’s Ratings have reduced the growth rate of Indian economy on Thursday. Earlier, Moody’s had estimated the growth rate of 6.4% in 2025. This estimate has been reduced due to Trump’s new tariff policy.
The Moody’s firm said that there is a risk of decreasing export from tariffs on diamonds, clothes and medical equipment. This can increase trade deficit with America. The farm said that the 90 -day restriction on the tariff may provide some relief, but India’s GDP growth will fall by 0.3% when the tariff is fully implemented.
GDP will increase at the rate of 6.5% in FY 2025-26
India’s economy will grow at a rate of more than 6.5% in FY 2025-26. This is more than an estimate of 6.3% of the current financial year i.e. 2024-25. According to the Moody’s report, the government will spend more capital. Apart from this, consumption will increase due to tax cuts and reduction in interest rate, which will give support to growth.
During this time there will be stability in the banking sector. The operating environment of Indian banks will remain a favorite in the next financial year. But after the necessary improvement in the last year, there will be a slight decline in their asset quality.
GDP growth was 6.2% in the third quarter
GDP growth was 6.2% in the October-December quarter of FY 2024-2025. It was 8.4% in the same quarter of a year ago (Q3 FY24). The National Statistics Office (NSO) released the data on 28 February.
The financial year 2024-2025 is estimated to increase at a rate of 6.5% of the economy. Earlier, in the estimate released in January, the growth rate for 2024-25 was estimated at 6.4%, which is a 4-year low. The GDP growth rate was 8.2% in the last financial year 2023-24.
The condition of GDP for the last 5 years
- 2020: -5.8% (decline due to Kovid-19 epidemic)
- 2021: 9.7% (Indication of Strong Rebound after epidemic)
- 2022: 7.0% (Standing Development)
- 2023: 8.2% (Economic reforms continue)
- 2024: 6.5% (projected growth decrease, still strong growth)
What is GDP?
GDP is used to track economy health. It shows the value of all the goods and service created within a fixed time within the country. It also includes foreign companies that produce by staying inside the country’s border.
There are two types of GDP
There are two types of GDP. Real GDP and Nominal GDP. In real GDP, the calculation of goods and service values is performed at the value or stable price of the base year. Currently, the base year is 2011-12 for calculating GDP. At the same time, the calculation of nominal GDP is done at the current price.
How GDP is calculated?
A formula is used to calculate the GDP. GDP = c+g+i+NX, here C means private conjpction, G means government spending, I mean investment and NX means net export.
Who is responsible for GDP’s grip?
There are four important engines to reduce or increase GDP. The first is, you and us. The more you spend, it contributes to our economy. The second is the business growth of the private sector. It contributes 32% to GDP. The third is government expenditure.
This means how much the government is spending in producing goods and services. It contributes 11% to GDP. And the fourth is, net demand. For this, India’s total exports are reduced by total imports, as India has more imports than exports, so its impact is negative on GPD.
